Lake City calls itself "The Gateway to Florida," but many of those who've reached the gates in the past 25 years have decided to stay. While the population of Lake City has hovered around 10,000 the last 25 years, the area just outside the city has grown by about 15,000. This once rural crossroads town, near the intersection of Interstates 10 and 75, is becoming a retirement destination, transportation hub, manufacturing center and a regional healthcare headquarters.

In the past year, this growth has created a construction boom: a new high school, an elementary school, a stream of restaurant and hotel chains, a new hospital and the expansion of the local mall with a third anchor tenant. Local companies added 1,000 new jobs in 1999.

In spite of the growth, Columbia County (pop. 55,385) has not shed its rural roots. Some 20% of the county's population lives at the poverty level. The median household income is $26,000. Schools rank below the state average in test performance and above the state average for the number of students receiving free or reduced-price lunches. The county's diversified economy and expanding tax base help pay for government services, but infrastructure hasn't kept pace with growth.

Local officials recently took steps to address the infrastructure gap. The county commission voted for a nickel-per-gallon increase in the local gax tax to fund efforts to relieve congested roads.

To raise income levels, the city, county and school district joined forces to offer a $5.7-million incentives package to Sykes Enterprises, a Tampa-based call center company. Their efforts persuaded Sykes to put its first Florida operation in Lake City. Two-thirds of the 432 jobs Sykes is expected to bring this year will pay a starting wage of $6.50 to $7.50 an hour, including healthcare benefits. Despite the low wages, local officials see the call center as the first step out of poverty for many. "These jobs are for common folks," County Commissioner Ron Williams says. "We've got more common folks in Columbia County than rich folks, and common folks need those jobs the most."

Local officials looking ahead are staking their economic hopes on the intersection of the interstates. The city is a popular location for manufacturers because of its easy access to major roadways. But beneath the layers of asphalt and tar are fiber optic lines that connect Miami to Houston and Atlanta to Jacksonville. "We don't know that potential yet," says Jim Poole, executive director of the county's Industrial Development Authority. This year he plans to complete a study on the impact of fiber optic access to local business and the potential for growth.

People to Watch

Lester and Anne Scaff own S & S Food Stores, a chain of convenience stores that has grown from a single Lake City site in 1961 to 45 in seven North Central Florida counties. The couple received the governor's leadership award last year for their commitment to community service.

Lamar Hires, a veteran cave diver and owner of Dive Rite, a diving equipment manufacturer, has explored and mapped the sinkholes believed to be connected to the Floridan Aquifer and Ichetucknee Springs in Columbia County. He served as a guide for film crews that produced a television documentary on the springs for the Arts and Entertainment cable channel and recently received a state award for his exploration work.

Businesses to Watch

Timco, formerly Aviation Sales, the aircraft refurbishing company, has increased its marketing and sales efforts and expects to double its workforce of 700 in the near future.

Sykes Enterprises, the Tampa-based call center company, will build a 42,000-sq.-ft. facility on 22 acres of land near Interstate 75, opening 200 acres of land next to the site. In the first year, it is expected to create 432 low-wage jobs that offer health and dental insurance coverage.

Affordability

As the retirees streaming from south Florida attest, you can make a dollar of Social Security income go a lot farther in Lake City than Lauderdale Lakes. But the market is getting tight. Two-bedroom apartments and rental houses start at $450 a month, but at the end of February, the city's only rental agent had less than half-a-dozen apartments vacant.

The average selling price for single-family homes in Columbia County in 1999 was $91,371, a 12.8% increase since 1997.

Tallahassee: Midlife Crisis

Restaurants in Tallahassee don't advertise early bird specials; instead, they offer two-for-one beer. Movie theaters don't cancel their late shows; that's when they draw the largest crowds. And 73% of the income earned by Tallahasseans comes from a paycheck, rather than investments or government checks -- the second-highest percentage in the state.

With a median age of 29.2, Leon County has the second-youngest population of any county in the state. Of the 219,458 residents, more than 50,000 are employees in state and local government and 52,000 are students in two state universities and a community college. But in spite of its youthful population, the Capital City is in midlife crisis. Baby boomers and their progeny know the city must shed its dependence on government, but they can't figure out how to keep enough technology graduates in town to ride the new economy. The bright spot: The business services sector added 1,500 jobs last year while construction, real estate, finance and utilities also grew. Unemployment remains lower than the state average. So the biggest labor issue for Tallahassee's well-educated workforce: Underemployment.

Part of the problem is the city is running out of room to grow. Within its boundaries, Tallahassee is so built-out that the focus now is on correcting mistakes and carefully managing future growth. But finding agreement on what to do next has not been easy. A group of business, neighborhood and environmental activists was so frustrated by the infighting between city and county officials it recently came up with its own report.

Blueprint 2000 included a brutally honest assessment of the city's shortcomings: Lakes are polluted; the forest canopy is disappearing; traffic is snarled; and the growth pattern is polarizing the city along racial lines. The recommendations: Spend $809 million on stormwater drainage, housing and traffic improvements and build two industrial parks. City and county commissions unanimously endorsed the study.

Business groups soon began rallying to get voter approval in November to pay for the changes by extending the local option sales tax beyond its expiration in 2004.

Meanwhile, economic development progress is steady. A Georgia-based Internet company, 1webplace, received a package of tax and research incentives and agreed to relocate into Summit East, a privately operated technology park east of the city.

Florida State University continues to reinvest its ample research revenues (last year it ranked third in the nation in the amount of money it draws from royalties with $46.6 million, mostly from the cancer-fighting drug Taxol).

Plans are under way for construction of an Imax Theater and a convention hotel downtown.

And construction starts this year at Southwood, a 3,200-acre residential and business venture planned by Arvida, the real estate arm of giant landowner St. Joe Co.

Southwood is expected to revitalize the stagnant economy on the city's south side on land long held by the timber giant. "People are really working together. There's more cohesiveness than ever before," says Sue Dick, interim president of the Tallahassee Chamber and the Economic Development Council of Tallahassee and Leon County.

People to Watch

Susie Busch Transou is president of Tri-Eagle Sales, a Tallahassee-based beer distributor, and daughter of August Busch III, chief of Anheuser-Busch. She is heading a group of business, government and university leaders working to get state officials to help them promote community priorities.

Neal Wade, vice president for economic development at St. Joe Co., moves to Tallahassee from Birmingham, Ala., where he led that state's economic development partnership program and brought in Mercedes-Benz, Honda and IPSCO steel. Wade was hired with the goal of cultivating new businesses and expanding jobs in the Florida Panhandle, where St. Joe is developing more than 90,000 acres in five counties.

Businesses to Watch

1webplace, the developer of e-commerce products and services, relocated its corporate headquarters from Albany, Ga., to Tallahassee in January and expects to expand its workforce from 60 to 300 within 18 months. CEO Don Rosenkoetter says he was attracted to Tallahassee because of the city's talent pool, its emerging technology sector and the support of local officials.

Co-owners Deanne Audie and Susie Maynard started Deanne's Office and Computer Supply 11 years ago. They've grown the company so fast in recent years that the Wall Street Journal ranked it the 39th-fastest growing firm in the state. The owners credit their success in part to their commitment to overnight delivery and the $3.3 million in minority contracts they have obtained through government programs. Operating at first from a one-room office, Audie would get in her car each morning and deliver products ordered by state agencies the day before. "People were shocked," Maynard recalls.

Affordability

A 1997 survey of Florida counties ranked Tallahassee 24th-most expensive in the state. Although there is no high-price coastal property in the county, the lower land costs allow homeowners to pack a lot more perks into their homes at more affordable prices. In 1999, the median sales price for homes in Tallahassee was $117,800. A 1998 survey by the Leon County property appraiser found the average rent for a two-bedroom apartment was $572 per month.

County Outlook

Baker, Columbia, Gilchrist, Suwannee, Union

Baker continues to grow as a bedroom community to Jacksonville, luring business and residents with low-priced real estate and tax incentives linked to its rural county designation. In the last year, construction has begun on a new motel, hospital, nursing home and courthouse.

Union and Gilchrist counties are expected to help fill vacancies at Sykes Enterprises, the Tampa-based call center that plans to create 432 jobs in Columbia County. The workforce development board is considering leasing school buses and purchasing autos to help with transportation from those counties. In Suwannee, developers are hitching their fortunes to the construction of a controversial cement plant atop a limerock bed in the heart of the county. The plant would become the biggest taxpayer in the county.

Business to WatchSuwannee American Cement Co., plans to build a $130-million cement plant near the Ichetucknee River. The state granted the company the air-quality permits needed to operate the plant in exchange for a limerock mine the state wants to close down to protect the spring-fed river. The plant would spawn close to 100 new jobs and provide needed tax revenue to the rural region. Environmentalists warn that the plant's proximity (3.5 miles) to the river threatens the river.

Dixie, Hamilton, Lafayette

In this farm region, the 35% drop in tobacco production quotas has had a ripple effect beyond farmers. Equipment dealers, bankers and the rural tax base also have lost revenue. Many tobacco farmers have begun to sell off their land in 10-acre tracts. As crop land has been replaced with mobile homes, which are valued below the homestead exemption, tax revenues have declined. "We've grown real fast in population, but not very fast in tax base and jobs created," says Eddy Hillhouse of the Suwannee County Chamber.

In Hamilton County, after seeing the textile industry dwindle to nothing after a NAFTA-inspired exodus of jobs to other countries, county officials now fear layoffs at Hamilton's primary employer, PCS Phosphate, as phosphate reserves decline. The company has helped the region prepare for the inevitable by donating land for a new industrial park outside of Jasper. County officials stake their hopes on bringing in new industry. In Lafayette, where tenants in the industrial park pay $1 a year for the first year's lease and $1 a square foot thereafter, job growth continues. A fishing lure manufacturer doubled in size, and a septic tank manufacturer moved into the industrial park.

Business to WatchLafayette County's Bass Assassin, a manufacturer of plastic worms for the fishing industry, is doubling in size.

Madison, Taylor

Taylor County, in a region traditionally known for timber and lumber operations, where unemployment stood at 9% three years ago, is now at almost full employment. A burgeoning business in electronics and instrumentation has contributed to much of the growth, but a handful of companies have found the job market so tight they've moved elsewhere in the state to find workers. Martin Electronics moved to Jefferson County with 50 new jobs, and Sports-Craft Boats, a boat builder, left for Sarasota. Buckeye, the major employer, posted record earnings for the last quarter of 1999, boosting local consumer confidence. Voters approved extending the local option sales tax to pay for construction of a regional hospital. And in Live Oak, which had lost its luster as a tourist haven, a new motel is under construction for the first time since the 1950s.

Business to WatchMajor Coast Eye Care Institute in Perry, which specializes in Lasix eye surgery and lens implants, is a major regional employer. Owner and operator Dr. Joel Sugar continues to expand his business and has lured skilled medical staff from other parts of the state.

Jefferson, Leon, Wakulla

Jefferson and Wakulla counties continue their residential growth as bedroom communities to Tallahassee. Wakulla also has exploited its proximity to the capital city by using its rural tax incentives to lure companies to its industrial park. Last year, CSG Systems Inc., a computerized billing center, moved to the industrial park, bringing with it 200 jobs and becoming one of the county's largest employers. Jefferson has ample room for business expansion, but one of the county's largest property owners does not plan to develop. Media mogul Ted Turner, who purchased the 8,100-acre Avalon Plantation, has signed a conservation easement to prohibit development of the land. Last year, Jefferson beat out other regional competitors and lured Martin Electronics to Monticello.

Business to WatchMartin Electronics, based in Perry, opens a new plant in Monticello this year with 50 employees.